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Job Creation in the Outsourcing Nation
by Kerry Hallard, CEO, National Outsourcing Association
Thursday, October 16, 2014

It was great to hear this week that unemployment has dropped to 6%, the lowest level since 2008. Comparing August 2013 to August 2014 figures, there are 736,000 more people in work, and rising. Brilliant news for the economy, even better news for three quarters of a million relieved jobseekers and their families. 

In other brilliant news, Sitel, a leading provider of customer care services, is opening a new contact centre in Coventry. It will create 600 jobs in a city which has recently suffered the pain of announcements that Severn Trent will cut 500 management jobs, and that travel company TUI is leaving town, taking 600 customer care jobs with it as it relocates customer care operations to Swansea and Luton.

Handy isn’t it, that 600 skilled call advisors could hit the Coventry jobs market at the same time that a major outsourced customer care operation sets up a new base slap bang in the city centre. Serendipity? Or ingenious planning?

Whichever, it’s a sure indicator of the huge role that outsourcing plays in creating and sustaining jobs in the UK. Our industry is after all, the second biggest aggregate employer, after retail. We’re a cornerstone of the service sector, which accounts for over half of Britain’s economic output. Outsourcing is a key driver of GDP and jobs, and therefore, has a big hand in the cheerful employment figures out yesterday.

For its next big contribution, outsourcing could boost employment in more ways than one. Although it has helped 500,000 people into work since launching in 2011, a hit rate of 32% in mostly choppy economic waters,  the Work Programme - the coalition government’s welfare-to-work scheme delivered by a range of private, public and voluntary sector organisations on a payment-by-results basis - is often touted as a failure.

There have been allegations of ‘creaming’ or ‘parking’ jobseekers according to how profitable they might be; effectively lavishing support on those who need it least. That could be all set to change, with a report out 10/10/14 by think tank Policy Exchange proposing a move to the Australian model of segmenting jobseekers, the Jobseeker Classification Instrument: a more complex diagnostic tool that assesses specific barriers to employment on a case-by-case basis, allowing support to be distributed more fairly and efficiently, with suppliers rewarded accordingly.

According to the Policy Exchange report: “to develop this new approach, it will be necessary to build capacity in the welfare-to-work industry and this will take time: advisers will need to be trained to deal with their new responsibilities; private and third sector providers will need time to build capacity and supply chains to deal with increased demand; and, most importantly, significant research and testing will need to be undertaken to create an effective segmentation process.”

I, like most people in the UK, would welcome the change to a fairer system of targeted support and incentivising/rewarding the outsourced providers appropriately. Welfare-to-work providers need to speculate to accumulate: get hiring, build capacity and most importantly, skill up in order to meet the oncoming challenge of disruption, while helping many thousands more people back into work.

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